Individual ITR filing

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VINITHA RAJESH (Querist)
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19 July 2011 A person is doing the business of agriculture in his capacity as proprietor during the year. He has not generated any income till date but incurred expenses. He has not filed the ITR as on 31st MArch, 2011. Is he required to do so, and if not whether the loss can be carried forward.

A company engaged in agricultural business want to acquire the business from the proprietor. For that they would enter into an agreement for acquisition. Is this procedure correct . Is there any problem if the proprietor has not filed his ITR for the year.

Can anybody please provide the format for such an acquisition agreement.

CA Sachin D Jain

CA Sachin D Jain (Expert)
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20 July 2011 Dear Vinitha,

Income tax return filing is compulsory, if a person has a taxable income or a person want to carry forward losses in the next year for the purpose of set-off, provided the return should be filed on or before the due date of filing of return.

First of all, you have to ascertain whether the expenditure incurred are for the purpose of earning taxable income. If it is not so, such expenses would not be allowed to be carried forward to next year for set-off.

In case of business acquisition by other company, it is necessary to have a valuation done of the business. In this regard, a professional may be appointed and assigned the task of valuation. Further, it is better to enter into acquisition agreement and mention therein the report of valuer and acceptance of value ascertained by the valuer, so that the transaction is valid in court of law.

I donot have the format of acquisition agreement. You can ask the same from anybody else.